NANJING, Nov. 12 (Xinhua) -- Factories around Taihu Lake, a major body of fresh water in east China which provides drinking water to 30 million people, will have to pay high fees for discharging pollutants from 2008 after a serious algae outbreak earlier this year.

    Chemical plants will be asked to pay 10.5 yuan (1.4 U.S. dollars) for each kilogram of COD, short for chemical oxygen demand, a major index to measure pollution, according to a pollution payment plan made by the Jiangsu Provincial Environmental Protection Bureau.

    The prices of COD per kg are set at 5.2 yuan, 1.8 yuan and 2.3 yuan for dyeing, paper-making and brewing factories, respectively, the plan says.

    "The high prices will force polluting companies to upgrade their treatment facilities and reduce waste," said Zhu Tiejun, the bureau's deputy director.

    Currently, the polluting factories only pay about one yuan for the treatment of their waste by special plants.

    According to Zhu, the plan will first cover 266 key polluting factories near the lake. Based on the practice, fees will also be imposed for the discharge of other pollutants, such as nitrogen and phosphorus, from 2009.

    The high pollution costs will force more than 1,000 small chemical factories to shut down, Zhu said.

    About 30 million people in Jiangsu and Zhejiang provinces and Shanghai rely on Taihu Lake, China's third largest freshwater lake, as a drinking water source.

    An algae outbreak at the end of May rendered tap water undrinkable for about 10 days for more than one million residents in Wuxi, a city in Jiangsu Province.